Following a stronger than expected NFP Report, U.S. Equity Markets got slammed Friday led by the 3.88% fall in the NASDAQ 100. Incredibly, the VIX only closed higher by 2.75% again finding it hard to break out despite American Indexes trading near their lows for the year. Markets retreated following a better than hoped for Employment Report – causing investors to fear little resistance to further Federal Reserve rate hikes. Despite the second day of equity drawdowns, the week is still on pace for weekly gains following a three-week losing streak. Non-Farm Payroll growth slowed in September, while the Unemployment rate dropped to 3.5% – as over 300,000 workers gave up looking for employment. The Fed remained hawkish Friday, with Fed Governor Christopher Waller saying that more needs to be done and rate hikes should not pause until inflation moderates. Investors will be anxious ahead of this week’s inflation figures for September. Within the S&P 500 Index, all 11 sectors finished lower. European Markets closed lower. Markets ended the week down again as doubts began to arise over the recent bounce. Investor concerns about a persistently hawkish Fed grew last week as the U.S. experienced mixed economic data and followed up with multiple Fed officials asserting a hike-and-hold policy stance. Bank of England Deputy Governor Dave Ramsden said he is aware of the impact monetary policy actions are having on households and firms but said it must stay the course. The European Central Bank’s Monthly Consumer Expectations Survey showed that high inflation expectations seem to be anchored into the regions outlook. German Industrial Output and Retail Sales slowed further in August, not helping the bullish mood. In Asia, Equity markets in mainland China and Hong Kong were closed for holidays. China’s markets will reopen on Monday, while Japan is closed today for a Holiday. The markets that were open saw a slight decline following a relatively strong week. Australia’s central bank noted in its recent Financial Stability Review that stability risks have increased amid tightened financial conditions. The Bank of Korea said it will maintain position of raising interest rates to combat inflation that will likely stay in the 5% to 6% range for a “considerable period.” And Japan’s household spending for September fell month over month as real wages fell for a fifth straight month. Elsewhere, Oil rose 4.73% while Gold fell 1.03% on a stronger Dollar.
To mark my 2625th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it lost 345 points on Friday and is now ahead by 2010 points for October, after finishing September with an incredible gain of 6660 points, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 2.80% lower at a price of 3639.
The Dow Jones Industrial Average closed 630 points lower for a 2.11% loss at a price of 29,296.
The NASDAQ 100 closed 3.88% lower at a price of 11,039.
The Stoxx Europe 600 Index closed 1.18% lower.
This morning, the MSCI Asia Pacific Index fell 1.2%.
This morning, the Nikkei closed 0.71% lower at a price of 27,116.
Currencies
The Bloomberg Dollar Spot Index closed 0.8% higher.
The Euro closed 0.6% lower at $0.9738.
The British Pound closed 0.7% lower at 1.1105.
The Japanese Yen fell 0.1% closing at $145.20.
Bonds
Germany’s 10-year yield closed 11 basis points higher at 2.20%.
Britain’s 10-year yield closed 4 basis points higher at 4.23%.
US 10 Year Treasury closed 7 basis points higher at 3.89%.
Commodities
West Texas Intermediate crude closed 4.73% higher at $93.40 a barrel.
Gold closed 1.03% lower at $1697.10 an ounce.
With many U.S. Markets closed for the Columbus Day Holiday, the only data of note is Euro-Zone Sentix Investor Confidence which will be released at 9.30 am.
Cash S&P 500
An absolute brutal Friday for the S&P as there was simply too much good news. The NFP Report was too strong as the Unemployment Rate dropped to 3.50% while the Atlanta Fed upped their Q3 GDP forecast to 2.9%.Unless CPI drops this week, it all but guarantees that the Fed will hike by 75 Basis Points for the fourth consecutive month and in the process guaranteeing causing a major recession as the Governments will not be able to cope with the higher interest payments given the level of debt in the system. Even my lower S&P buy level proved to way off the mark. I bought the S&P at an average rate of 3695 before getting stopped near the close at 3649 and I am now flat. The present environment continues to confront us with charts that we have never seen before as the 10-Year Yield is now showing 10 consecutive weeks of Green Candles in vertical fashion. The consequences are brutal with 30-year mortgage rates up to 7.12% from 2.85% just 15 months ago. The last time we saw mortgage rates at these levels was 20 years ago. The 10-year chart is now showing a very pronounced negative RSI Divergence and unless history does not matter anymore, then a massive reversal is coming. Given the background I just cannot be a seller at current prices still believing that we are on the cusp of a massive rally in the S&P given the backdrop, including sentiment levels at all-time lows. Friday’s move lower has left a massive ‘’Open Gap’’ from Thursday’s 3744 closing price to Friday’s 3702 high print. The S&P has support from 3590/3610 where I will again be an aggressive buyer with no stop. If I am taken long I will have a T/P level at 3648.
EUR/USD
Wrong!! Shortly as the NFP was released I was stopped out of my .9840 long Euro position at .9745 and I am now flat. This morning, the Euro is opening lower at .9725. We have support from .9640/.9710 where I will again be an aggressive buyer with a lower .9585 ‘’Closing Stop’’.
March Dollar Index
No Change. I am still short at 108.90 with a now higher 110.35 exit level. If this level is triggered, I will be back with a new update for my Platinum Members.
Cash DAX
After the DAX traded lower to my 12280 buy level we had a small bounce enabling me to cover this position at my revised 12340 T/P level as emailed to my Platinum Members and I am still flat. This morning, the DAX is trading a lot lower at 12150. We have further support from 11970/12070 where I will be an aggressive buyer with a 11895 ‘’Closing Stop’’.
Cash FTSE
I am still flat the FTSE. I will now lower my buy level to 6820/6900 where I will be an aggressive buyer with the same 6775 stop.
Dow Rolling Contract
I was lucky with my Dow call on Friday. After the market traded the whole of my buy range for a 29540 average long position we had a small rally to my revised 29580 T/P level and I am still flat. Margin selling near the close saw the Dow close lower. We have strong support from 28820/29020 where I will be an aggressive buyer with a wider 28595 ‘’Closing Stop’’.
Cash NASDAQ 100
In contrast to Thursday’s session, the NDX led Friday’s aggressive sell-off closing lower by nearly 4%. This move lower saw the whole of my buy range executed for a now 11280 average long position. I will leave my 10995 wider ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 11360 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
December BUND
The stronger than expected NFP Report saw the Bund traded lower to my 137.80 second buy level for a now 138.25 average long position. I will leave my 136.95 wider ‘’Closing Stop’’ unchanged whole lowering my T/P level to 138.80. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
My Gold plan worked well with the market trading lower to my 1693 buy level before rallying to my 1704 T/P level and I am still flat. Gold has support from 1660/1675 where I will again be a buyer with a lower 1649 ‘’Closing Stop’’.
Silver Rolling Contract
This morning, Silver has hit my second buy level at 19.70 for a now 20.05 average long position. Given how undervalued Silver is trading I will have now stop on this position. I will now lower my T/P level to 20.70.
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